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Tuesday, July 1, 2003, 4:45:44 PM, you wrote:
DT> Yuki,
DT> I will try to give a more technical description of the situation:
DT> According to many [reliable]technical indications the recent N100
DT> trend [counted from Feb13, 2003] was terminated by June 17.
DT> The measure** of this trend was >450units, unexpectedly high for the
DT> last 3 years[the previous highs were 288, 183, 318, 258units].
DT> This fact makes me cautious to go Short, the market will not loose
DT> this extra "energy" at once.
Wise decision. A lot of money is lost trying to short consolidations
at their first indication. This money (the new and early shorts)
forgets about all the long players who missed the first move, and are
just waiting to come piling in on any move that looks like a
resumption. The chances of being shaken out of an early short are
very great, especially when the market has had this much energy, as
you observed.
DT> If the trend is over, I do not expect new highs, the next peaks
DT> should be lower than June17.
You may get a new high, but you may get it on smaller volume, and you
may see a lot of negative divergences -- price is at a new high, but
other indicators are not. Then again, you may not get a new high of
course, or -- like here -- you may get it on a day like we had today,
with so many volume and price alarms going off that you absolutely
have to be convinced there may be some life left in this thing, no
matter how absurd it seems.
DT> This fact makes me cautious to go Long with the present local lows.
DT> I dont like to be cautious, it makes me nervous.
It's a *very* nervous time to be in the market right now, I think.
Very nervous. But . . . try staying out, and see how nervous that
makes you.
I give you an example:
I bought NEC (you have this in the data I send you) 6701 intraday on
5-22 when it took out the 5-16 high. I took a 1/3 profit on the 5-30
close (sorry to say, but that's part of this business) and I sold the
balance on the 6-16 open, which dovetails nicely with your 6-17
pivot. (A long hold for me recently, from 5-22 to 6-16, but between
5-30 and 6-16 there was simply no logical place to get out. The
thing was defying gravity, so I let it.)
I did NOT want to get in again last Friday, for many of the same
reasons you probably feel nervous, and I did not (sorry to say). But
on Monday I was forced back in when it took out the 6-12 high on
truly huge volume, and I did. Gosh am I ever glad I did, however I
will take 2/3 of it off the table tomorrow, win, lose, or draw,
probably 1/3 on the open and another 1/3 immediately if the open
doesn't hold . But look what staying out would have done to me. I
would have missed another absolute killing. But I got it. ^^_^^
And look at the chart!! The action of the past two days comes *on
top of* the May-June explosion. What rational person would expect
this? But it's an example of what one misses when one tries to out
guess the market.
DT> After June17 I stay 10%-15% invested for small Long movements with
DT> targets +4% to +5%.
DT> This fact makes me nervous too.
DT> The expectation for better retracements is a reason [explanation] for
DT> moderate Volumes the last two weeks.
Maybe. I think a better explanation is that the markets are going
into the summer doldrums, and earnings are probably not going to
propel higher yet (if ever). But that didn't stop us from absolutely
blistering volume today, the highest I've seen on a non-options and
futures expiration day in at least 4 years, probably longer. Volume
was *huge* here today, and we tacked on 2 percent to this run that
has come too far too fast. And it sure wasn't window dressing on the
first day of the new quarter.
BTW, NEC has DOUBLED now from it's 4-14 low. Doubled, I said. I am
sure the fundamentals don't warrant it, but there it is. Am I
nervous about this position? You better believe it. This is red hot
money ready to get out at the first snarl.
DT> DT
DT> **see #28220, #28224 messages for the measure of a trend. I suppose
DT> Mr Heizo Takenaka is not interested for such humble technical
DT> details...
Ah, Takenaka-san is breathing a big sigh of relief right now. Our
"managed currency" has fought off the dollar bears (even though we
had to spend many tens of billions of US$ equivalent to hold it where
it is), and the banks have now suddenly gone from huge portfolio
losses into the black (not to be confused with their dud loans, most
of which will remain duds). But people in high places are breathing
again here.
I probably made my entire year this month of June, however, and
that's the way this business is. Whatever comes in now to the end of
the year will be so much icing on the cake. Such a *strange*
business, this one. ^_^
Yuki
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